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EASTWEEK
Weekly analytical newsletter on Russia, Ukraine, Belarus, the Caucasus and Central Asia (also available in Polish as Tydzień na Wschodzie)

Contents

No. 25(175) | 2009-07-15
Also available in PDF

Analyses

  • Limited results of the Russian-US summit

    During his visit to Moscow on 6-8 July, President Barack Obama met his Russia counterpart Dmitry Medvedev and the prime minister Vladimir Putin, delivered an address at the Russian New Economic School, and held a meeting with representatives of the Russian opposition. A number of documents were signed as a result of the talks, including an agreement laying down basic parameters of the new arms control treaty, and a presidential commission was appointed to co-ordinate co-operation in specific fields.

  • Progressing destabilisation in Central Asia

    The security situation in the Uzbek and Kyrgyz parts of the Fergana Valley and in Tajikistan has deteriorated in recent weeks. The main causes include the activities of Islamic militants (including Al Qaeda, which operates in the area from Afghanistan and Pakistan), as well as internal tensions, which are particularly strong in Tajikistan, and the deepening economic crisis. Because of the scale of the problems, the area may soon become seriously destabilised with escalating conflicts and crises of the state, especially in Tajikistan. This may adversely affect the situation throughout the region. The rising instability is also affecting the external players. It supports Russia's policy of rebuilding its dominant position in Central Asia and poses a threat to Western interests in the area, especially the ISAF mission in Afghanistan.

Events

 

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IMF prompts privatisation in Belarus
EASTWEEK

2009-07-15

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Natalia Koladina, the IMF permanent representative in Belarus, announced on 7 July that the Belarusian authorities had agreed to prepare and carry out the privatisation of five large enterprises through open tenders within the next few months. However, this does not mean that Belarus will start selling shares in its strategic companies.

The privatisation is yet another condition that Belarus has to meet in order to obtain further loans (the entire credit line for Belarus is US$3.5 billion, of which around US$1.4 billion has been paid out so far). The IMF expects the Belarusian leadership to adapt the legislation governing ownership transformations to international standards and to establish a Privatisation Agency. Then, the specific enterprises whose shares would be offered for sale by the end of 2010 are to be designated. In an interview for the Austrian newspaper Die Presse on 6 July, Belarusian president Alyaksandr Lukashenka said these conditions were reasonable and justified.

Nevertheless, the open privatisation transactions which the Belarusian leadership has pledged to carry out would be inconsistent with the practice of arbitrarily and secretly choosing investment partners for individual projects, which the Belarusian government has been following until now. Moreover, if tenders were genuinely open and accessible to anyone, Russian capital could take over Belarusian assets, which is the main source of concern for the Belarusian leadership. It appears that for these reasons, Minsk will not offer shares in the strategic petrochemical and machine-building companies for sale. In order to meet the IMF's expectations, it will carry out privatisation transactions in other sectors which have already been opened to foreign investors, such as the banking sector. <kam>

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